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You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Murphy -v- Gilligan and ors [2008] IESC 70 (19 December 2008)
URL: http://www.bailii.org/ie/cases/IESC/2008/S70.html
Cite as: [2008] IESC 70, [2009] 2 IR 271
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Judgment Title: Murphy -v- Gilligan and ors Composition of Court: Murray C.J., Geoghegan J., Fennelly J., Kearns J., Macken J. Judgment by: Geoghegan J. Status of Judgment: Approved
Outcome: Dismiss | ||||||||||||||
THE SUPREME COURT 235/06 Murray C.J. Geoghegan J. Fennelly J. Kearns J. Macken J. IN THE MATTER OF AN APPLICATION UNDER THE PROCEEDS OF CRIME ACT, 1996 BETWEEN: MICHAEL F. MURPHY Plaintiff/Respondent and JOHN GILLIGAN First-named Defendant GERALDINE GILLIGAN Second-named Defendant/Appellant DARREN GILLIGAN AND TRACEY GILLIGAN Third and fourth-named Defendants JUDGMENT of Mr. Justice Geoghegan delivered the 19th day of December 2008 This judgment will be dealing with a number of appeals and motions brought before this court by one or more of the above-named defendants. For the initial title of the judgment, I have adopted the title and record number of an appeal by Geraldine Gilligan, second-named defendant/appellant brought by notice of appeal dated the 3rd July, 2006 against an order of the then President of the High Court, Finnegan P. I will, in due course, be indicating what the other appeals and motions relate to and I will list their formal titles in a schedule to the judgment. All the appeals and motions relate to proceedings brought by the then Chief Superintendent, Michael F. Murphy, the above-named plaintiff/respondent who was a “member” of An Garda Síochána within the meaning of the Proceeds of Crime Act, 1996. The above-named John Gilligan is the separated husband of the above-named Geraldine Gilligan and they are the parents of the above-named Darren Gilligan and Tracey Gilligan. I have decided to structure this judgment in a somewhat unorthodox manner. I am doing so because I have come to the conclusion that it would be pointless to embark on these specific appeals and motions without first explaining in considerable detail this unusual Act – the Proceeds of Crime Act, 1996 and the case law in which it has been judicially interpreted by this court. I will start with the Act itself and the relevant sections. The general scheme of the Proceeds of Crime Act, 1996 is that if a court is satisfied on the evidence tendered by the applicant that property over a particular value is the proceeds of crime, a freezing order may be made in respect of that property which may remain in force for at least seven years. After that period, an application may be made to the court that the property or part of it be transferred to the Minister for Finance or to such other person as the court may determine. That order is known as a “disposal order”. As I will be demonstrating, various opportunities are given under the Act to enable a person to claim the frozen property or any part of it by establishing that it is not directly or indirectly the proceeds of crime. The statutory machinery relevant to these appeals and motions which was availed of is as follows: First of all, there was an application ex parte by the Chief Superintendent being a person authorised by the Act to bring it for an order under that section which is described as an “interim order” prohibiting the persons named in the order which were the above-named defendants from disposing of or otherwise dealing with a certain specified property during the period of twenty-one days from the date of the making of the order. There is express provision in the section enabling an aggrieved party to have the order varied or discharged if it is shown that the property or a specified part of it is not the proceeds of crime or that the value does not exceed the threshold. The interim order was made by Costello P. on the 21st November, 1996 and no application was brought within the twenty-one day period to have it discharged or varied. The next stage in the procedure is that the same applicant makes an application for what is perhaps unfortunately though not inaccurately called an “interlocutory order”. This application is an application under section 3 of the Act. Section 1 of the Act defines “interlocutory order” as meaning an order under section 3. I should perhaps mention that the Proceeds of Crime Act, 1996 has been amended by the Proceeds of Crime (Amendment) Act, 2005. The relevant parts of these proceedings pre-date that Act. As section 3 is a key part of the legislation and highly relevant to these proceedings, I think it important to cite in full almost the whole of the section. It reads as follows:
(ii) specified property that was acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of crime, and (b) that the value of the property or, as the case may be, the total value of the property referred to in both subparagraphs (i) and (ii) of paragraph (a) is not less than £10,000,
(II) that the value of all the property to which the order would relate is less than £10,000: (2) An interlocutory order –
(b) shall provide for notice of it to be given to the respondent and any other person who appears to be or is affected by it unless the Court is satisfied that it is not reasonably possible to ascertain his, her or their whereabouts. (4) The Court shall, on application to it in that behalf at any time by the applicant, discharge an interlocutory order. (5) Subject to subsections (3) and (4), an interlocutory order shall continue in force until –
(b) the expiration of the ordinary time for bringing an appeal from that determination, (c) if such an appeal is brought, it or any further appeal is determined or abandoned or the ordinary time for bringing any further appeal has expired, (6) Notice of an application under this section shall be given -
(b) in case the application is under subsection (3), by the respondent or other person making the application to the applicant, (7) (Not relevant to this appeal) The scheme of subsection (3) is that even if a freezing order is in fact made, the respondent or any other party may have it discharged or varied as long as that order is in force, if he or she shows to the satisfaction of the court that the property or a part of it is not proceeds of crime or that the order already made under subsection (1) causes any other injustice. I will deal later with the potential problem of repeat applications on identical evidence. The next section of importance in these appeals and motions is section 4. I will also cite that section in full.
(3) The applicant shall give notice to the respondent (unless the Court is satisfied that it is not reasonably possible to ascertain his or her whereabouts), and to such other (if any) persons as the Court may direct of an application under this section. (4) A disposal order shall operate to deprive the respondent of his or her rights (if any) in or to the property to which it relates and, upon the making of the order, the property shall stand transferred to the Minister or other person to whom it relates. (5) The Minister may sell or otherwise dispose of any property transferred to him or her under this section, and any proceeds of such a disposition and any moneys transferred to him or her under this section shall be paid into or disposed of for the benefit of the Exchequer by the Minister. (6) In proceedings under subsection (1), before deciding whether to make a disposal order, the Court shall give an opportunity to be heard by the Court and to show cause why the order should not be made to any person claiming ownership of any of the property concerned. (7) the Court, if it considers it appropriate to do so in the interests of justice, on the application of the respondent or, if the whereabouts of the respondent cannot be ascertained, on its own initiative, may adjourn the hearing of an application under subsection (1) for such period not exceeding 2 years as it considers reasonable. (8) The Court shall not make a disposal order if it is satisfied that there would be a serious risk of injustice.” Before returning to these sections, I think it appropriate to draw attention in a general way to some other provisions of the Act namely, sections 6, 7 and 8. Section 6 provides (inter alia) for the right of a person whose claimed property has been frozen under section 2 or section 3 to apply to the court for payment out of necessary legal expenses for the purposes of defending the proceedings under the Act. It is clear from a chronology of the steps taken in these proceedings that a large part of the time and energy spent in litigation on behalf of the above-named defendants was in connection with applications under section 6 so that they could have funds with which to pay their lawyers. Section 7 entitles the court, whenever an interim order or an interlocutory order is in force, to appoint a receiver. I think that it would not be unfair comment to state that a great deal of the time and energy spent on behalf of the State in this litigation related to an application under section 7. Indeed as far as I am aware and much to the frustration of the plaintiff/respondent an order for receivership has not yet been made. That application is based on fears of destruction of property and lack of insurance. The two forms of application are intertwined, in that as I read the papers, the defendants were particularly concerned to resist the appointment of a receiver of the property of which they were in possession and that in that connection the application for funds under section 6 was just as much, if not more related to the defence of the application for the appointment of the receiver as to availing of any of the opportunities conferred by the Act to dispute the alleged status of the property. The significance of section 8 is that it confers on the court the right to accept oral evidence of a belief nature provided that the court is satisfied there were reasonable grounds for the belief. The same applies in proceedings under section 2 on affidavit or if the court so directs in oral evidence. Without referring to any other parts of the Act which are not really relevant to these proceedings, it is obvious to any lawyer with or without the assistance of judicial decisions that the scheme of proceedings under this Act is quite unique. Unfortunately, the Act came to be enacted without any appropriate Rules of the Superior Courts in force to regulate the procedures. That problem has now been rectified with the result that an application under section 3(1) may be brought by originating notice of motion. Likewise, the proceedings brought at least seven years after an order under section 3 has been made can also be brought by originating notice of motion. However, that was not originally the case and since the rules contained no provision, a plenary summons was issued in accordance with the rules. An issue then arose as to whether, in accordance with the rules, a statement of claim had to be delivered if requested. This court held that a statement of claim was required. It is important to understand however that that is all it held. As will be clear from several judgments of this court to which I will be referring, the procedure under the rules for an ordinary action instituted by plenary summons could not possibly be literally applied to proceedings under the Proceeds of Crime Act. The concept of setting down for trial and securing notice of trial (apart of course from a process specially directed by the court) would clearly conflict with the terms of the Act itself. But before the new rules were made the statement of claim was simply the document which expanded on the nature of the claim which, as is well known, is minimally stated in the general endorsement of claim on a plenary summons. As was subsequently held in this case, the absence of a statement of claim did not invalidate proceedings which had culminated in an order under section 3(1). One of the appeals now before this court relates to an order of the High Court (Finnegan P.) refusing to discharge the section 3(1) order in an application under section 3(3) based on fair procedure arguments. There is a further potential attack on the section 3(1) order in the form of motions to this court to extend the time for appealing against it. These matters will be returned to in due course but first I think it important to outline in chronological sequence the decisions of this court on the structure of the Proceeds of Crime Act, 1996 and how it is to be interpreted. The first such decision was in a judgment in these proceedings. The context was that on the 7th February, 1997 Costello P. purported to make an order pursuant to section 6 of the Act but imposed various conditions one of which provided for potential revocation of a provision for a costs order if it was discovered by the court later, whether by another judge or not, that the order had been unnecessary. The second, third and fourth-named defendants appealed that order to this court and the appeal was allowed by a bench consisting of Hamilton C.J., Murphy J. and Barron J. It was decided that the appeal should be dealt with in camera and, therefore, it would seem that the judgment delivered by Murphy J. was not circulated. Certainly, in some subsequent cases in which I was involved, I have no recollection of having sight of it. The judgment, however, would have been well known to the parties as it had been delivered in these proceedings. As far as I am aware, it was the first judicial attempt to analyse the Act. Murphy J. in his unreported judgment delivered the 13th May, 1997 having paraphrased sections 2 and 3 of the Act and having drawn attention to the terminology i.e. “interim order” and “interlocutory order” went on to observe as follows: “The pattern of conventional civil proceedings in the High Court might lead one to anticipate that as soon as practicable after the making of the interlocutory order, and subject to the completion or disposal of any formal or procedural matters, the issue as to whether the particular property did or did not constitute the proceeds of crime or was or was not acquired with property that constituted proceeds of crime would be determined in a plenary hearing before the High Court. That is not the case. The order described in the 1996 Act as ‘an interlocutory injunction’ (that is an obvious error – the expression should have been ‘an interlocutory order’) unless revoked by the court, continues in full force and effect for not less than 7 years from the granting thereof and until a ‘disposal order’ within the meaning of section 4 of the 1996 Act is made by the court on the application by the applicant. The application for a disposal order does provide the person having possession or control with a final opportunity to show, as presumably he was unable to show in the previous 7 years, that the property in question was not tainted in the manner envisaged by the Act. But primarily the purpose and effect of the disposal order is to terminate the period of suspension and finally to deprive the respondent of any right which he or she might have in the property which would then stand transferred to the Minister for Finance or such other person as the court would determine. During the limited period in which an interim order is in force or the lengthy period for which an interlocutory order may endure, the property the subject matter thereof remains in the possession and control of the respondent subject to the power conferred upon the Court to make a variety of orders for the preservation thereof, in particular the Court may, whilst any such order is in force exercise the power conferred on it by section 7 of the 1996 Act to appoint a receiver to take possession of the property and in accordance with the Court’s directions, to manage, keep possession or dispose of or otherwise deal with such property.”
The next case is F. (McK.) v. FC (Proceeds of Crime) [2001] 4 I.R. 521 and the passage to which I want to refer is at page 523. The former Chief Justice, in a judgment in which Murray J. and Fennelly J. concurred, held in allowing certain appeals that the High Court had erred in treating applications for discovery as premature because the pleadings were not closed as the statutory framework in question was such that the interlocutory hearing constituted, in real terms, the trial of the issue. The judgment contained the following significant passage: “Finally, I come to s. 4. It is provided that where the interlocutory order has been in force for not less than seven years, the court may make an order called a disposal order directing that the whole of the property or a specified part is to be transferred to the Minister for Finance or such other persons that the court may determine. Again, the onus is on anybody disputing the making of such an order to show that the property does not constitute the proceeds of crime. Given that statutory framework, it is evident that, in a sense in a practical way, the interlocutory order or the application for an interlocutory order is the trial of the real issue in the case and that obviously renders the proceedings of an unusual nature. They are not criminal proceedings, at least I will assume for the purposes of this application, that they are not criminal proceedings in the normal sense, and they are certainly civil proceedings of an unusual nature since they do not take the usual form of issues that have to be tried at a plenary hearing and so on. The procedures laid down are of an unusual nature and they are of course, self evidently, and it is not using excessive language to say, of a draconian nature. They may be unnecessarily of a draconian nature. However, that does not arise in this case where it is not being alleged that the Act is unconstitutional and that is an issue which obviously has been raised in other cases and in respect of which there is an appeal pending before this court for determination. But it is on any view a fair description to say that it confers draconian powers on the Criminal Assets Bureau and these are obviously powers which, in the view of the Oireachtas, were necessary, given the serious problems with which the Act obviously was designed to deal. However, this court, at this stage, must approach the Act on the basis that its constitutionality is not an issue in these proceedings and that this is what the Oireachtas has decided to do. Given the presumption of constitutionality of course, it necessarily follows that the normal presumptions also apply, namely that everyone’s constitutional rights will be respected and fair procedures will be observed in relation to the far reaching powers which are conferred on the court by the Act. And that is all by way of saying in effect that the courts would necessarily have to be vigilant to ensure that, in the operation of the Act, the rights of the persons affected by these far reaching powers are respected.” “The next feature of the Act which the appellants relied on as rendering the Act unconstitutional was that it permitted delays which were oppressive in their nature. The court, in considering this submission, finds it unnecessary to express any view as to whether the surprisingly lengthy period which elapsed between the making of the order under section 2 in the first case and the hearing of the interlocutory application under section 3 was wholly or in part the fault of the appellant in that case, as contended by the respondents. It is sufficient to say that the procedure under the Act is perfectly capable of being operated in such a manner as to ensure that no unreasonable delay elapses between the making of the interim order and the interlocutory order: that indeed is clearly what the Act envisaged, since under section 2(5), the order is to lapse after the expiration of the period of 21 days from the date of its making, unless an application for the making of an interlocutory order is brought during that period. As to the claim that the period of seven years which must elapse before a disposal order is made is unduly oppressive, that rests on the misconception that the application for a disposal order can in some sense be equated to the trial of an action in respect of which the legislation earlier provides for interlocutory orders being made. That is clearly not the nature of the scheme provided for in the Act. A person who is affected by the provisions of an interlocutory order can apply at any time before the expiration of the seven year period for an order discharging or modifying the interlocutory order. The court is satisfied that the submission that the procedure is so oppressive as to be unconstitutional because of this time limitation is not well-founded.” The next case is F. McK v. A.F. (Statement of Claim) [2002] 1 IR 242. In that case on the face of the report, Denham J., Hardiman J. and Murray J. agreed with a judgment which I delivered and there was a further judgment to the same effect by Fennelly J. I made it clear at the beginning of my own judgment that I was adopting Fennelly J.’s “very clear treatment of the relevant statutory provisions and rules of court” but that I was adding some comments of my own with particular focus on the nature of the proceedings. It seems clear that, whatever may be the official record, the other three judges were agreeing with both judgments. At page 255 of the report, Fennelly J., in his judgment, makes the following observation: “The relief sought by virtue of s. 3 is not, in spite of the statutory name given to it, in truth an interlocutory order. It is substantive relief provided for by statute. This court had observed in its ex tempore judgment in McK. v. C. [2001] 4 I.R. 521 that the interlocutory order could be regarded as the real issue.” “Taking the interlocutory injunction as the closest equivalent type of interlocutory order, I find that the s. 3 order lacks several of the essential attributes of such an order. The purpose of an interlocutory injunction is to preserve the status quo between the parties, or putting it more cautiously, to maintain a just equilibrium between the parties until their respective rights can be substantively determined. Implicit in this is that the court must act urgently on the basis of limitations inherent in the impossibility of determining conclusively complex disputed issues of fact or law. Implicit also is the assumption that the substantive issues will be determined as soon as is reasonably possible. At that later stage, the entire substance of the material disputed at the interlocutory stage, may be reopened. The interlocutory injunction is a provisional measure granted for a time long enough, but no longer than is necessary, to ensure that the rights of the parties are not prejudiced until they can be comprehensively determined. The s. 3 order is not of that character. It is not interlocutory in the sense of being ancillary to the substantive relief. It does not bear that relationship to the s. 4 order. It is true that s. 3 of the Act of 1996, confers powers on the High Court to make an order of the type known as a Mareva injunction and that a Mareva order is interlocutory in the normal sense. It is designed to preserve a certain state of facts pending the hearing of an action. It does not dispose finally of the property affected. It restrains any dealing with it for as long as it remains in force. Nonetheless, the interlocutory order under s. 3 is, in my view, a substantive remedy for several reasons. Firstly, the restraint on dealing is itself a free-standing, substantive remedy. It imposes a complete embargo on any dealing with property. Secondly, it is not ancillary to an order to be made in the future under s. 4, as an ordinary interlocutory injunction is. In a normal case, the plaintiff must, at the trial of the action, succeed in establishing his right to substantive relief. In the case of the Act of 1996, s. 4(1) permits a disposal order to be made on the sole ground that an interlocutory order has been in force for seven years. Nothing new needs to be proved. Thirdly, in truth, the substantive allegation is that the subject property represents, directly or indirectly, the proceeds of crime. The court must, according to s. 3, be satisfied of this essential fact at the time it makes the interlocutory order. The court may make the order if ‘it [so] appears to the court, on evidence tendered by the applicant.’ This evidence may, by virtue of s. 8 be hearsay. There would have been no need to introduce this provision, if the application were truly interlocutory. Order 40, r. 4 of the Rules of the Superior Courts, 1986 permits hearsay evidence on such motions, subject to the deponent giving his means of knowledge. In making this determination, the court does more than decide that there is a fair issue to be tried. It decides that the subject property in fact represents the proceeds of crime. Fourthly, once this order is made, it continues in force indefinitely unless either the applicant applies for it to be discharged (s. 4(4)), or unless the respondent can show to the satisfaction of the court that the property does not constitute the proceeds of crime (s.4(3)). There does not even appear to be any obligation on the applicant to apply for a disposal order at the end of seven years. Fifthly, even if this last point is not high on the scale of importance, the fact that an interlocutory order must be in force for a minimum period of seven years before the disposal order can be sought makes it impossible to regard it as interlocutory in the sense in which that word is used in the Rules of the Superior Courts, 1986. Geoghegan J. in his judgment, has examined the nature of an interlocutory injunction. I agreed fully with his observations.” “It is abundantly clear, therefore, that orders under s. 3 are final orders even though they can be discharged and are not just temporary orders. No significance is to be attached to the name which the Act has given them, except possibly to the extent that it might be reasonable for the rules-making committee to provide for procedures whereby the plaintiff could actually get into court shortly after the initiating document issued, a result which is achieved by the ordinary interlocutory injunction procedures. This would happen if the Rules provided that the procedure was to be by originating motion on notice or indeed by special summons. But in the absence of any special rules or an order of the High Court permitting the procedure by special summons, the plaintiff must proceed as he has done by plenary summons.” The definitive judgment on the structure of the Act including the separateness of the two sets of proceedings i.e. the application under section 3 and the application under section 4 is the judgment of Keane C.J. delivered in this court with the unanimous approval of Murray J., Hardiman J., Geoghegan J. and Fennelly J. on the 8th March, 2004. I call it “definitive” because it was delivered in the context of a challenge to the correctness of the judgments to which I have previously referred mounted by four defendants through their counsel, Dr. Forde. That judgment constituted a refusal to alter the previous jurisprudence with particular reference to McK v. A.F cited above, an appeal on which Keane C.J. did not sit. The judgment of Keane C.J. of the 8th March, 2004 in Murphy v. M.C. contains the following passage with reference to the McK case. “I am satisfied that that decision was entirely correct in law. It was a more elaborate and fully considered extension of what was said in the judgment of the court in the case of Murphy v. M where the constitutionality of the statute was in issue and where it is stated in the judgment delivered by me, which was the judgment of the court, on the constitutional issue as to the claim that the period of seven years which must elapse before a disposal order is made as unduly oppressive, that this rests on the misconception of the application for a disposal order, that is the order under s. 4, can in some sense be equated to the trial of an action in respect of which the legislation earlier provides for interlocutory orders being made, that is clearly not the nature of the scheme provided for in the Act. In the subsequent case of McK v. C [2001] 4 I.R., I said that given the statutory framework, it is evident that in a practical way the interlocutory order or the application of interlocutory order is the trial of the real issue in the case. They differ entirely from the procedures which were always associated with the granting of interlocutory relief by the courts in normal civil litigation between parties and I entertain not the slightest doubt that the conclusion of the court in F.J. McK v. A.F. was entirely correct and I would reject the invitation that it should be overruled.” On the 21st November, 1996, a plenary summons was issued on behalf of the above-named respondent, Michael F. Murphy, against the appellants seeking in the general endorsement of claim an order under section 2 and thereafter under section 3 of the Proceeds of Crime Act, 1996 freezing certain property described in the schedule thereto and an order under section 7 of the same Act appointing one Barry Galvin, solicitor, as receiver to take possession of such portion of that property as the court might order and thirdly, an order pursuant to section 9 of the Act requiring the above-named appellants to swear and deliver an affidavit specifying all their property, income and sources of income during the past ten years. The respondent was entitled to sue under the Act, being a member of the Garda Síochána not below the rank of Chief Superintendent. He was, at that time, a Chief Superintendent. An ex parte application under section 2 was then made to Costello P. in the High Court and he made the order applied for on the 21st November, 1996. It was expressly directed that the order would remain in force for 21 days but even without that direction that would be the statutory effect of section 2(5) of the Act. The order of Costello P. was, of course, made on foot of an affidavit of the respondent. A motion seeking a section 3 order was issued on behalf of the respondent on the 25th November, 1996. A return date on that motion was the 5th December, 1996. That application was grounded by a new affidavit sworn by the respondents. By order of the 5th December, 1996, Costello P. made what can only be categorised as a temporary section 3 order because although on the face of the order expressed to be made pursuant to section 3, it was to be in force only until after Thursday, 19th December, 1996, there is no specific provision in the 1996 Act for this particular form of order. I can see no reason, however, why it should not be made where appropriate. When the application resumed before Costello P. on the 19th December, 1996, the learned President made the following order: “It is Ordered pursuant to s. 3 of the Proceeds of Crime Act, 1996 that the defendants or any of them or any person having notice of this order be prohibited until further order of the court in this regard from disposing or otherwise dealing with the whole or if appropriate a specified part of the property set forth in the Schedule hereto or diminishing its value otherwise than by order of this honourable court. And It is Ordered that the motion do thereupon stand adjourned generally with liberty to re-enter.” In the period December, 1996/January1997 there were other motions to the High Court (Costello P.). One of these was a motion by the plaintiff, Chief Superintendent Murphy (as he then was) for the appointment of Mr. Barry Galvin, solicitor, as receiver of the properties pursuant to section 7 of the 1996 Act. The second motion was one brought by the second, third and fourth-named defendants (the appellants in this appeal) seeking payments out from the frozen properties of “reasonable expenses” in relation to the proceedings pursuant to section 6 of the Act. For one reason or another no order was ever made, as far as I can ascertain, on the section 7 application though it was afterwards transformed into an application that Mr. Frank Cassidy, solicitor of the Chief State Solicitor’s office be appointed receiver. I do not think that this application has much relevance to these proceedings at any rate except to say that I would have the impression from the papers that the receivership application was in a sense of greater immediate concern to the defendants than the freezing order itself and it is possible that that is at least partly the reason why there does not appear to have been any pressing application to either Costello P. or later to Moriarty J. to have the application under section 3(1) fully defended by plenary hearing. I will be returning to this matter in due course. The section 6 application was, at all material times, of huge concern to the defendants who brought the application. Costello P., however, made an unusual order to which I have already referred which involved permission for payment out of the monies but also provided for the revocation of that permission by any judge at a later stage if it emerged that the circumstances of the defendants were such that a section 6 order had not been necessary. That particular unorthodox order was appealed to the Supreme Court and the Supreme Court reversed it and sent the matter back to the High Court. The judgment of Murphy J. to which I have already referred was the main judgment in that appeal. For the present, it is not necessary to deal further with the section 7 or section 6 applications in this judgment. I will now move to where section 3 proceedings came before Moriarty J. Apart from what it is contained in an order of Moriarty J. made the 16th July, 1997, it is not entirely clear from the papers as to how the matter came before that judge. The only rational explanation would seem to be that it was re-entered before him pursuant to the liberty to re-enter in the order of Costello P. of the 19th December, 1996. But that order was expressly made pursuant to the notice of motion dated the 25th November, 1996. Clearly, Moriarty J., quite correctly, considered that he was dealing with the sequence of orders expressly referred to in his order as having been made on the 5th and 19th December, 1996, the 30th January, 1997 and the 7th February, 1997. It is to be noted that the order of the 7th February, 1997 which followed on an adjournment order of the 30th January, 1997 was the order reversed by the Supreme Court. Even though rather unusually the Supreme Court order did not just send the matter back to the High Court but specified that it was to go back to Costello P., it seems almost certain that what happened was that that section 6 application together with the main section 3 application were all listed before Moriarty J. In this connection it should be noted that the 16th July, 1997 which was the date of the order of Moriarty J. was a Wednesday. It seems clear, therefore, that these applications were not simply being placed before Moriarty J. in the context of an ordinary motion list. There is no reason to believe that they were not in for hearing in the ordinary way. That did not necessarily mean, of course, that they were all to be heard on the one day but there does not appear to me to be any basis for any idea that they were in only for mention or something of that kind. The order made on the 16th July by Moriarty J. in its operative part reads as follows: “It is Ordered pursuant to section 3 of the Proceeds of Crime Act, 1996 that the defendants or any of them or any person having notice of this order be prohibited until further order of the court in this regard from disposing or otherwise dealing with the whole or if appropriate a specified part of the property set forth in the schedule hereto or diminishing its value otherwise than by order of this honourable court And It Is Ordered that the motion do thereupon stand adjourned until Monday, 28th July at 10.30.” Before moving to deal directly with those appeals from the orders of Finnegan P., I want to make some further observations in relation to the period immediately following the order of Moriarty J. of the 16th July, 1997 (which I will hereafter referred to as “the relevant order of Moriarty J.” so as not to confuse it with later orders). It is impossible to ascertain precisely what transpired before Moriarty J. It has been suggested at the hearing of these appeals that counsel for the State respondent were under the same alleged misapprehension as counsel for the appellants allegedly were, that there was still going to be some kind of plenary hearing under section 3(1) in which the appellants could resist the making of a section 3(1) order. But evidence of the attitude of the State shortly after the hearing before Moriarty J. does not seem to bear this out. In a letter of the 7th October, 1997, under reference “Mr. F. Cassidy” the Chief State Solicitor writing to Michael E. Hanahoe & Co., solicitors for the second-named appellant repudiated the proposition that under the Proceeds of Crime Act, 1996, delivery of a statement of claim was necessary and argued that all remedies were available by way of motion. He then said the following: “If your client wishes to bring the matter before the court at this stage it would appear that the appropriate manner to do so would be by way of a motion seeking relief pursuant to section 3 (subsection 3) of the Proceeds of Crime Act, 1996.” A major difficulty in this case is that whereas the appellants or some of them may well have believed and may well have been advised that they could have a plenary hearing whereby issues of ownership could be litigated, it does not follow that they had addressed their minds to the precise stage at which this would be done. It could be done by way of defence of an application under section 3(1) but it could also be done equally effectively by way of an application under section 3(3) to say nothing of ultimate rights under section 4. Indeed, there may be some evidence to suggest that at one stage a receivership application was going to be used, if possible, as the vehicle for opposition. Discovery was sought for the purposes of that application. It came before O’Higgins J. who did not consider it was relevant to that application. What is absolutely clear, however, is that from a very early stage i.e. the judgment of Murphy J. in these very proceedings, the legal advisers understood or ought to have understood the structure of the Act and the nature of the orders to be made under it. I now turn to the main appeals before this court which are against the orders of Finnegan P. to which I have already referred. This arose in motions purporting to be brought pursuant to section 3(3) of the 1996 Act. Even though in a much earlier part of this judgment, I have set out the terms of this subsection and placed it in context, I think it helpful nevertheless to set out the subsection itself again at this point in the judgment. The text is as follows: “(3) Where an interlocutory order is in force, the court, on application to it in that behalf at any time by the respondent or any other person claiming ownership of any property concerned may if it is shown to the satisfaction of the court that the property or a specified part of it is property to which paragraph (I) of subsection (1) applies, or that the order causes any other injustice, discharge or, as may be appropriate, vary the order.” “My first reaction on reading the issues is that they cannot possibly arise under section 3(3). As I read section 3(3) it is designed to deal with a situation where an order which has been made is now working an injustice and therefore ought to be varied, which does not allow me to revisit the appropriateness of an original section 3 order. Because to do so would be entertaining in this case an appeal from O’Higgins J. (then corrected to Moriarty J.) and an appeal from the Supreme Court.” “Moriarty J. took note of the foregoing and indicated that the evidence being put before the court by the applicant on this day was procedural rather than substantive and Moriarty J. accordingly felt that Mr. Hunt’s position was not compromised by his presence at the application.” “I am satisfied that section 3 is a final order in the real sense of a final order, it is not some statutory invention of a final order. It is, however, subject to two possibilities of review. The first is the review provided on an application pursuant to section 4, which does not arise on this application. Secondly, the matter can be looked at, to use a neutral phrase for the moment, by the court on an application pursuant to section 3(3) of the Act. It is so well established in law that a court cannot reopen or review its orders but one has to look at section 3(3) and construe it carefully. There are two circumstances in which the court can reopen the matter under section 3(3); the respondent at any time, notwithstanding that there has been a finding that the property is the proceeds of crime, that is a finding under paragraph 1 of subsection (1) which for accuracy sake is .. ‘Specified property and that the property constitutes directly or indirectly the proceeds of crime or was acquired in whole or in part with or in connection with property that directly or indirectly constitutes proceeds of crime’. I am satisfied that that is not the intent or effect of section 3(3). It is not a licence for the court to reopen something which has been determined by a final order and to do so at large. Section 3(3) envisages that where an order exists it is a valid order but that it may cause an injustice. And that, as I understand it has caused an injustice by being in force. Then the court can ameliorate that injustice if necessary by discharging the order or by varying it.” Quite apart from the lack of intention on the part of the Oireachtas to permit discharge of the order on grounds of faulty procedure leading up to the making of the order, Finnegan P., has, in my view, correctly analysed the contextual meaning of “an injustice” in section 3(3). Such context contrasts sharply with the context in which the same word is used in section 3(1). The last two lines of that particular subsection read as follows:
Rather than moving at this stage to the second main appeal before the court, that is to say, the appeal on the issue on whether the section 4 application brought on a special summons is valid or not, I think it more useful and more logical to deal at first with the motions before this court to extend the time for appealing against the order of Moriarty J. of the 16th July, 1997. Each of the appellants has brought a motion to this court for an order to extend the time for appealing against the order of Moriarty J. of the 16th July, 1997. In some of these motions there is also a request for an extension of time to appeal the earlier orders of Costello P. Appealing those last mentioned orders would serve no purpose whatsoever and would have no effect beneficial to any of the appellants. It is not necessary for me to go into this matter further. I have no hesitation in expressing the view that such extension should be refused. I intend to concentrate only therefore on whether the time for appealing against the order of Moriarty J. should be extended. I am satisfied that it should not. As is well known, the basic principles relating to extension of time for serving a notice of appeal to this court are contained in Éire Continental Trading Co. Limited v. Clonmel Foods Limited [1955] I.R. 170 Lavery J., in a judgment with which the other four members of the court agreed, accepted that there were three matters which were proper matters for the consideration of the court in considering whether time should be extended but that they in turn had to be considered in relation to all the circumstances of the particular case. The discretion of the court was a completely free one. The three matters which had been suggested by counsel were and are: 1. The applicant must show that he had a bona fide intention to appeal formed within the permitted time. 2. He must show the existence of something like mistake and that mistake as to procedure and in particular the mistake of counsel or solicitor as to the meaning of the relevant rule was not sufficient. 3. He must establish that an arguable ground of appeal exists. Despite an averment in one of the affidavits about intention to appeal, I am not at all satisfied that any of those conditions were complied with. Even if they were, the time is simply far too long. I am satisfied that what really happened was that without legal aid, counsel could not be paid. At the time of the orders of Costello P. and Moriarty J., the primary concern of the appellants was the obtaining of an appropriate section 6 order that would enable them pay their lawyers. Their lawyers did not need the Supreme Court to tell them in even a single, never mind several judgments, that an application could be brought under section 3(3) and indeed that ownership issues could be ultimately reopened in a section 4 application. But not only was no long term injustice going to be caused by a section 3 order being made at the time it was made but in fact, in my view it would have been contrary to the provisions of the Act to have made a whole series of temporary orders. Sections 2 and 3 provide for freezing procedures intended to be carried out quickly but with the safeguard that an intermediate application can be made. The opening words of section 3(1) refer to an application being made to the court and it appearing to the court “on evidence tendered by the applicant” that a person is in possession or control of certain property etc. This does not mean, of course, that a person interested cannot resist an order under section 3(1) but the absence of means to pay lawyers is not a reason why the court should delay in making the order. Section 3(3) is deliberately enacted with a view to preventing any error or injustice. There are passages in the skeleton submission filed on behalf of the respondent with which I particularly find myself in agreement. It is pointed out, for instance that “No appeal against the section 3 order was brought at the time that it was made.” The submission goes on to further point out that numerous applications of different kinds were brought by the appellants and that the section 3 order having been in place for more than seven years, an application under section 4 of the 1996 Act was issued on the 22nd December, 2004. The respondent also questions as to why a period of approximately eight years passed before application was made under section 3(3) and a period of approximately eleven years passed before an application was made to extend the time for appealing the section 3 order of Moriarty J. I would emphasize yet again that the excuse that it was not until the 21st February, 2006, it became clear that CAB was treating the interlocutory order as a so-called final order is clearly false. The expression “final order” which has been misunderstood and has been misused constantly in these proceedings expressly appeared in the order of the 13th April, 2005, made by this court in the appeal from an order of O’Sullivan J. refusing to direct delivery of a statement of claim. The Supreme Court dismissed the appeal in an ex tempore judgment delivered by me but concurred in by Fennelly J. and Kearns J. It was pointed out in the judgment that the question of a statement of claim no longer arose because a section 3 order of Moriarty J. terminated the section 3 proceedings subject only to applications under section 3(3). The judgment went on to point out that no conceivable injustice could arise as “any real or substantive issues between the parties can be dealt with adequately under the Act within the section 4 proceedings” which we had been told were already issued. I do not think at that time that we considered the question of an application under section 3(3) because I do not recall it being drawn to our attention that such an application can still be made up to the time that a section 4 order is made. That indeed may well be the more appropriate remedy now but that issue does not arise in this appeal. To return to the time limit question, the position would seem to be quite clear. Irrespective of whether there was any confusion or not in relation to the order of Moriarty J., an application to extend the time could still have been brought long ago. Over many years now the structure of the Act has been explained by this court. It would serve no purpose to extend the time now. I have already touched on the issue of whether the substantive matters which the appellants want to litigate can still be litigated. In my view, they can be and indeed that view has been expressed in previous judgments of this court. Although anything I say in this regard may be obiter dicta. I am firmly of the view that an application under section 3(3) can still be brought and that that might well be a more appropriate remedy than raising the questions in the section 4 application but that is all a matter for the appellants’ advisers. I would quite definitely refuse an order for the extension of time. In so far as extensions of time are sought in respect of the earlier orders of Costello P., I would reject them on the same principles. This would seem a suitable and relevant point in the judgment to make some general comments about how this Act should be interpreted. As I see it, it is a unique piece of legislation and this same view has been expressed, of course, by Keane C.J., Fennelly J. and other judges in previous cases. That being so, I think that there is a danger of driving up a blind alley, if in interpreting any particular section of this Act, attempts are made to find analogies in other legislation. It is important to stand back, look at this Act as a whole and consider what clearly motivated the Oireachtas in adopting the form which it took. There was a parliamentary tight rope to be walked, because on the one hand, the Oireachtas sought a quick and effective machinery to prevent criminals obtaining benefit from proceeds of crime while on the other hand, care had to be taken to ensure that the legislation would meet all constitutional criteria. The first object was achieved by the unusual draftsmanship of sections 3 and 4. The first part (subsection (1)) of section 3 mandates the court to make a freezing order “on evidence tendered by the applicant” (my emphasis). There is, however, an important proviso to this mandatory provision. The order is to be made “unless it is shown to the satisfaction of the court, ‘on evidence tendered by the respondent or any other person’” (my emphasis) that the property does not constitute proceeds of crime and was not acquired with or in connection with property which constituted proceeds of crime or that a particular value threshold was not achieved. There is then a further proviso that the court is not to make the order at any rate “if it is satisfied that there would be a serious risk of injustice.” I have no doubt, of course, that as a matter of fair procedure, cross-examination would be permitted in relation to the “evidence tendered by the applicant” and also of the “evidence tendered by the respondent or any other person” if speedily sought. Essentially, the scheme of the subsection is that an onus is placed on the respondent to discredit the evidence relied on by the applicant if that evidence is prima facie probative. It would seem to me that the Oireachtas would have foreseen that there might be all kinds of circumstances in which quite reasonably a respondent might not immediately be in a position to satisfy a court that the property in question or a specified part of it did not constitute directly or indirectly proceeds of crime. But it would not have been intended or contemplated that there would be endless adjournments or indeed temporary section 3 orders which were not provided for by the Act while perhaps a year later or more, the respondent would be in a position to challenge the evidence relied on by the applicant. It was easily foreseeable, in my view, that such delay might not just be a consequence of proof gathering such as discovery etc. It might be even more likely be related to the necessity or perceived necessity of the respondent to put himself or herself in funds to pay for lawyers. This might require an order under section 6. That is precisely part of the reason for some delay in this case. This brings me to the rest of the machinery. For that very reason and with an eye on the Constitution, the Oireachtas enacted section 3(3) which enabled the respondent in an application under that subsection and in a situation where an order under section 3(1) was already in force to apply to a court to have that order discharged or varied. Such an order could be made if such respondent satisfied the court that the property or a specified part of it was property to which paragraph (I) of subsection (1) applies or in other words that the property frozen or part of it was not directly or indirectly proceeds of crime or if he satisfies the court that the order under section 3(1) “causes any other injustice”. In the proceedings seeking a disposal order under section 4 there is yet another opportunity given. None of this was seriously disputed by Mr. McDowell, S.C., counsel for the respondent at the hearing of the appeals and motions though he did, at times in a vague kind of way, reserve his position. At any rate, correspondence and affidavits emanating from the State seem to clearly accept that a remedy under section 3(3) was available to any of the appellants. As to whether principles of estoppel and, in particular, the principles in Henderson v. Henderson could be relevant in any given situation is another day’s work. At this stage, I would merely opine that any right to bring later applications and to have them heard is always subject to there being no abuse of the process of the court. Since the substantive issues if in fact they arise as to whether the properties are the proceeds of crime or not have never in fact been aired in court by the appellants with a view to the State’s claim being challenged, it would seem to me that in their case at least there can be no question of estoppel or abuse of process in their bringing their own applications under the Act at this stage. As I see it, that is how the Act is intended to operate and, therefore, I do not think that any arguments based on the possibility of a succession of appeals can be considered relevant in interpreting the rights under the Act. I now return to the actual matters before this court. The principal matter still remaining to be disposed of is the appeal from the High Court (Finnegan P.) from the order refusing to dismiss section 4 proceedings by reason of their being instituted by a special summons. Those proceedings were brought in the name of Felix J. McKenna, successor to the above-name Michael F. Murphy I have read the reserved judgment delivered on this issue by Finnegan P. on the 30th January 2006. In the papers before me it is not entirely clear which appellants’ motions were joined in the motion the subject of this judgment. That seems to me immaterial because the judgment constituted the ruling by the High Court on the issue and it is now under appeal to this court. I do not see any purpose in covering again in this judgment the ground more than adequately covered by Finnegan P. because I find myself in agreement with him on all relevant aspects of the judgment. The first point made by the learned former President was that taken as a whole the provisions in the Act itself were consistent with a statutory intention that applications to the court should be in a summary manner. Finnegan P. goes on to point out that if relief under section 4 of the 1996 Act is to be sought in separate proceedings as clearly indicated by decisions of this court, then O. 3(21)(b) of the Rules of the Superior Courts as inserted by Rules of 2001 is relevant. That sub rule provides that procedure by special summons may be adopted in “any other proceeding which is required or authorised by law and for which no other procedure is prescribed by these rules.” The judge took the view that a section 4 application under the 1996 Act came within this category. I think that he is right. Indeed he went on to point out that there were other provisions in the rules which would allow a discretion to permit proceedings by special summons. These are to be found in the judgment and I do not think it necessary to go into them now. I would, at any rate, make the general comment that the rules of procedural jurisprudence are not as strict as they were in the past. The courts have assumed wide discretions provided no injustice is done. I cannot see that the slightest injustice is caused here by section 4 proceedings being brought by special summons and I would have no hesitation in dismissing the appeal. Any motions or appeals relating to costs ought to be disposed of when the costs of these appeals and motions are being considered in due course. The motion of the fourth-named defendant concerning legal aid cannot be entertained by the court. Accordingly, I would dismiss the appeals and refuse the motions which I have considered in this judgment. Finally, I would like to make clear that in preparing this judgment, I have had due regard to the personal submissions and documentation handed in to the court by Mr. John Gilligan, the first-named defendant, who was unrepresented at the hearing of these appeals and motions. SCHEDULE within referred to List of appeals and motions to which this judgment relates APPEALS 129/06Appeal by the first-named defendant, John Gilligan, from a judgment of 21st February, 2006 and order of Finnegan P. made on the 6th March, 2006 refusing his motion inter alia for declarations that sections 6 and 10 of the Proceeds of Crime (Amendment) Act, 2005 have no application to the proceedings, their having been commenced prior to 2005, that the order of the 16th July, 1997 (Moriarty J.) under section 3 of the Proceeds of Crime Act was an interlocutory order and for an order vacating that last mentioned order. 235/06 Appeal by the second-named defendant, Geraldine Gilligan, from the same judgment of 21st February, 2006 and order of 6th March, 2006 refusing her motion under section 3(3) of the Proceeds of Crime Act, 1996 to discharge, vary or set aside the order made against her under the said section 3 on the 16th July, 1997 (Moriarty J.). 71/06 Appeal by the second-named defendant, Geraldine Gilligan, from an order of Finnegan P. of the 30th January, 2006 refusing her motion to dismiss proceedings against her under section 4 of the Proceeds of Crime Act, 1996 on the grounds that they were brought by special summons. 86/06 Appeal by the second-named defendant, Geraldine Gilligan, from a subsequent costs order of 13th February, 2006 awarding the costs of the application to the plaintiff against the second, third and fourth-named defendants. 94/06 Appeal by the fourth-named defendant, Tracey Gilligan, from an order of Finnegan P. of the 30th January, 2006 made in the same terms as in 71/06 refusing her motion to dismiss the section 4 proceedings on the same grounds. MOTIONS 172/98 Motion on behalf of the first-named defendant to extend the time to appeal from the order of Costello P. of the 5th December, 1996. 293/08 Motion by first-named defendant to extend time to appeal from section 3 orders of Costello P. of 5th December, 1996 (the subject of his previous motion 172/98), 19th December, 1996 and of Moriarty J. of 16th July, 1997. 58/08 Motion brought by the second-named defendant for an extension of time to appeal from the section 3 order by Moriarty J. of the 16th July, 1997. 320/08 Motion by the third-named defendant, Tracey Gilligan, for an extension of time to appeal from the said section 3 orders of the 5th December, 1996, 19th December, 1996 and 16th July, 1997. 327/08 Motion by the fourth-named defendant, Darren Gilligan, for an extension of time to appeal from the section 3 order of Moriarty J., 16th July, 1997. 328/08 Motion by the fourth-named defendant, Darren Gilligan, for legal aid under the CAB scheme for the purpose of his motion to extend time. 330/08 Motion by first-named defendant, John Gilligan, for leave to join with the second-named defendant’s appeal 71/06 relating to the section 4 proceedings. | ||||||||||||||